First, a confession: When I was the editor of MoneySense several years ago, I always enjoyed editing David’s popular Retirement column for the magazine. I realized my own retirement was looming (or, at least, semi-retirement) and always found David’s research scrupulous and his numeracy reliable, and some of the research from those columns has been incorporated into the book. Both at MoneySense and in other media outlets, David tended to use many of the sources I used myself and respected—people like retired actuaries Malcolm Hamilton and Fred Vettese, both of whom show up in the book. (I might add that David’s volume makes a nice complement to Vettese’s own books, particularly Retirement Income for Life.)
In an interview this past October, David noted he will be 63 by the time this review appears, but he has no imminent plans for the traditional full-stop retirement so popular with earlier generations. As he tells his book’s readers, after a corporate career spanning management consulting, corporate financial planning, and operations, Aston turned to financial journalism, which he has now been doing for 12 years. “I view journalism as a full-time job, but one that allows me to work at the pace I feel like and provides flexibility for doing things like travel,” he tells me. “There are times where I work as hard or harder than I typically did in my corporate career, and other times where I work at a more relaxed pace.”
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It’s obvious from reading the book that Aston has put a lot of thought and research into the topic of retirement, if not for himself and his wife, certainly for his fellow Canadians, whom he assumes for the purposes of his book are mostly financially knowledgeable, middle-class citizens.
A nice added feature are the many charts and tables that spell out just how much money you need to accumulate to retire at various ages, whether you want a “bare-bones” lifestyle, a high-end luxury one defined as $100,000 in annual income for couples ($80,000 for singles), or the vast swath of retired lifestyles in between. Whether you’re single or a couple, all the numbers you need to project finances into your future golden years are there. For most of the calculations in these charts, Aston created simple Excel spreadsheets.
And, as MoneySense has made clear over the years, you don’t necessarily need $1 million to retire, although you will need that much and more if you are counting on a deluxe retirement with all the bells and whistles (exotic travel once or twice a year, two nice cars in the garage, eating out regularly, etc.). But Aston says a “basic” retirement at age 65 can be achieved with just $375,000 in retirement savings for a single person or $200,000 for a couple. (A couple can get by on a smaller nest egg because they typically share costs for things like accommodation.)
Aston makes a conservative estimate of $18,000 a year coming to each retiree through the federal government (typically Canada Pension Plan and Old Age Security), with the rest coming from investments in RRSPs, TFSAs*, non-registered accounts and other sources (ideally from employer-sponsored defined benefit, or DB, pension plans, though these are becoming increasingly rare).
The book will appeal to Canadians still decades from retirement who are wondering how much money they’ll need to sock away, but will be doubly useful for those already in retirement or on the cusp of it. And Aston doesn’t forget about those nearing life’s finish line. In fact, he devotes a chapter to the various late-in-life housing options, like retirement homes, in-home care, assisted living and nursing homes, all with cost estimates. Generally, he sees these being funded by the proceeds of the sale of the retiree’s principal residence. However, Aston isn’t that enamoured of long-term care insurance, except in certain special circumstances that he covers in great detail in the book.